The Motley Fool provides advice on money management and investing. However, its recommendations can and should be used by people in other fields. For example, the following 20-word tip, from the “Fool’s School,” should be memorized by everyone who encounters statistically-based claims or findings in politics, medicine, psychology, education, and all other arenas of our lives:
“Never blindly accept what you read. Think critically about not just words, but numbers. They’re not always what they seem.”
Here are 5 examples illustrating how numbers in statistics often do NOT mean what they seem to indicate:
If the 14 players on a basketball team have a median height of 6 feet 6 inches, it might seem that 7 of those athletes must be shorter than 6’6” whereas 7 must be taller than that. Wrong!
If the data on 2 variables produce a correlation of +.50, it might seem that the strength of the measured relationship is exactly midway between being ultra weak and ultra strong. Not so!
If a carefully conducted scientific survey indicates that Candidate X currently has the support of 57% of likely voters with a margin of error of plus or minus 3 percentage points, it might seem that a duplicate survey conducted on the same day in the same way would show Candidate X’s support to be somewhere between 54% and 60%. Bad thought!
If a null hypothesis is tested and the data analysis indicates that p = .02, it might seem that there’s only a 2% chance that the null hypothesis is true. Nope!
If, in a multiple regression study, the correlation between a particular independent variable and the dependent variable is r = 0.00, it might seem that this independent variable is totally useless as a predictor. Not necessarily!
The Motley Fool’s admonition, shown above in italics, contains 20 words. If you can’t commit to memory the entirety of this important warning, here’s a condensed version of it:
“Numbers. They’re not always what they seem.”